The Philippines’ balance of payments (BOP) deficit widened in March, reflecting sustained external pressures, although the country’s foreign exchange reserves continue to provide a strong buffer, the Bangko Sentral ng Pilipinas (BSP) said.

Data released by the BSP showed the BOP posted a $2.6-billion deficit in March 2026, bringing the cumulative shortfall for the first quarter to $5.3 billion.

The BOP, which measures the country’s transactions with the rest of the world, has been under strain in recent months amid a wider trade gap and volatile capital flows. Foreign direct investments (FDIs) plunged to pandemic-era lows last year, which many analysts partly attributed to a loss of investor confidence stemming from governance issues linked to the flood control scandal. The BSP earlier noted that “rising geopolitical risks are weighing on investor sentiment,” as tensions abroad and tighter global financial conditions affect capital flows.

Despite the deficit, the BSP said the country’s external position remains resilient. The central bank reported gross international reserves (GIR) at $106.6 billion as of end-March, equivalent to 7.0 months’ worth of imports and 3.9 times short-term external debt—well above global adequacy thresholds.

In a previous statement, the BSP said the decline from February’s all-time high of $112.7 billion was mainly due to national government payments on foreign debt, along with central bank foreign exchange operations and downward valuation adjustments on gold holdings amid movements in global prices.

BSP Governor Eli M. Remolona Jr. said earlier that the central bank had only lightly intervened in the foreign exchange market, even as the peso fell to consecutive record lows in March due to the escalation of the Middle East conflict—reaching an all-time low of P60.74 on March 31 and remaining within the P60-per-dollar range for much of the month.